10-year at 2.44. our roadmap begins with unemployment holding steady at the 17-year low. futures point to new records of the open apple's chip response confirming its products are vulnerable to that security flaw and the corporate tax response, bonuses on the way at jetblue and billion plus q4 earnings hit over at morgan stanley december nonfarm payroll growth missed forecast, we still saw 2.1 million jobs added in '17. average hourly opens up 2.5 from a year ago labor force, unchanged, a lot of discussion of the amazon effect, what's happening to retail. >> i think so, i was disappointed obviously you want more jobs and more people to be hired to get a little increase in wage. but this is what's happening i spoke to planet fitness yesterday, interesting company i i. >> there's a lot more people who work at the sears and kmart than there are planet fitness and that's the old and new economy can'ting amazon and sears being wrecked by ham zon. >> in retail, warehousing up 30k, couriers, up 19k. >> isn't it something? new economy. >> i've had every single one of the warehouse companies on that is one of the greatest businesses in the world. that had been a core site realty some are data farms but some are ways to be able to get product very quickly from amazon to you. i don't think it's going to happen but jobs are shifting we need more truck drivers and fewer people at retail. >> as the number hit a few moments ago, we saw odds of a fed hikes come down a touch. gold win positive just a touch the point was it is a three handle that spooks the fed and we don't have that at 4.1. >> i was doing work on home builders and saying, two of the top ten s&p stocks were home builders, there is going to be a rate increase that is too far for these guys and we're not going to like themanymore. that may be out further, maybe i was too negative because this isn't going to spook anyone i like that. >> so three for the year is -- >> i think that's fine it's fine. >> when i saw that number and kind of yawned and said today is a day about brady versus mcdaniel's versus belichick. what this number said to me was not to relax but say this is not to hot one of the principle bearish components that are left, the economy is running too high. what do they have next is david right when he speaks to the judge saying let's be more bullish? why is he not afraid to say he's bullish? i think the answer is because tepers always had a level of confidence from the day that he yelled at me when i wanted to buy the prim core stove bonds and said get out of here, you're not buying these bonds, you're going to bury your clients he said it in front of a roomful of 200 people. i like that guy. he pants me. can you keep it down he made me yell louder >> the tepper comments were important. overall, what a week for macro german retail sales, nearly double the estimate i love the euro so much coming back from india, some day, somehow, been there about a month and she bought property in italy, what can i tell you that's the best investment we can't own stocks. bought property with strong dollar and italy coming baen spain and germany strong britain good and we're good. >> a dynamic -- pmis are roaring and 1.4, down from the prior 1.5 in germany. >> the autos are doing so great there. i think when they raise rates, it's going to take the pressure off, put more of inflection in the yield curve and the bears use one more prop. technical talk for saying that when you get these short term rates that i higher or even with longer term rates it means recession. i don't see a lot of recession from these numbers by the way, i think the storm will help. the storm is going to help was this is -- >> winter storm. >> the bomb, the cyclone bomb whatever, it is hurting cars collisions and corrosion are huge take a look, did you see the way some of these -- >> auto retail is the best sector of the year. >> amazing. >> worst sector of last year. >> i like car max very much and storms helped. i know you don't want anyone to have an accident but storms cor corps rode the numbers i'm seeing, how is the shovel we don't have any shovels. how's the roofing? >> we don't have any roofing we don't have any pipe ig. pipes bursts and that costs a lot of money when you have a snowstorm in places where they haven't had snowstorms, pipes burst. and that is a fabulous business. usg upgraded price when the wall board gets wet, you can't have mold in your house. >> true, a lot of people will be doing housework over the next few days. >> very important. >> a lot of news regarding apple. confirming all iphones and maces are in fact affected by the processer flaw and will release a patch for the safari web browser within days. and ubs has a note showing an improvement in demand for the iphone x despite supply chain volatility and bill board says jimmy could leave his role at apple music. he joined apple as part of the purchase of beats in 2014. reiterates a buy, 190 target and asps are still upside. >> i've known steve since time memorial he has done surveys at times that made you feel no good but what he just said today was basically, forget the survey of right before the holiday things are fine. i've got good communication, still have benchmarking to do but someone can find a corner case or synthetic benchmark that has a bigger impact. initial work by most real workloads are showing small impact brian krzanickrzanich, he knows periodically that i like nvidia so much. nvidia is not a person it is a dog at my house. but brian is money i don't like the way people have been jumping all over brian. i saw someone on twitter said brian should resign. brian is fabulous. if brian is saying, security update is not impacting performance, i think intel is -- it's going to be a tempest in a tea pot. i believe that. >> this particular episode >> i believe that. >> you don't think it says something more systemic? >> no i don't. i'm going to defend brian right here brian is an honorable man and good man i'm not saying -- where i do the facetious, he's the real deal. if he's assuring me things are fine, i'm going with him. >> you would defend a long position in intel? >> i would. >> throughout all of thf >> no, just now. i want to hear from brian things are better and no performance degradation. that was important and i got it. i'm saying brian is not saying to me something that i'll regret he isn't that kind of guy. brian is an amazing guy. >> does that mean amds benefit -- >> i've been working with lisa s suh and there's a little edge because it was messy for intel they've got a better sales call to make. i want doctors -- everyone is rooting for the doctor, we want to have a duopoly and she's amazing. our country is so great, whether it be the key note css on sunday, a brilliant oregon stater, whether it be dr. suh, m.i.t. worked from nothing new york proud, these are people that are great i find there's not the back biting in the semiindustry that there is in the internet industry. >> that may be true. still competitive business. >> it's competitive but more harvard yale than army/navy. >> the northeast is still digging out with the blind airports are looking back to business contessa brewer is at boston's logan airport with more. good morning, contessa >> good morning, carl, good to see you this morning the good news is that the airports are up and running. the bad news is they are operating on limited runways at this point both jfk, laguardia and newark are having a big struggle to get back up and running. the same thing is true in boston we saw a delta flight -- come this way let me show you the boards, look up here at the departures, you can see at these major airports, we're still seeing a lot of cancellations so people who have tried to escape the storm are likely to encounter a big headache getting out of town for one reason, more than 4,000 flights canceled yesterday, another 1100 canceled today. that takes planes maybe out of the mix for a lot of folks amtrak is running a modified schedule that's what they call it when i looked, cancellation, cancellation, cancellation, especially from the new york to boston corridor and the trains that were scheduled were sold out already. that's a problem the roads, the major interstates and mass turnpike, up and running today, they are mostly clear. here's the problem, you've got to get to thoroughfares and we're talking about slushy, icy messy roads. historic flooding along the coastline is creating a big icy problem for the crews that need to clear out in boston they had feet of snow, in worse sister, 18 inches of snow we're keeping a close eye on how the recovery goes, but at this point, the good news, if you're at logan airport like i am and you're checking the boards, what's up? i've got two flights i'm keeping my eye on. one is to montego bay, scheduled right now for 11:00 a.m. the other is cancun, now scheduled at 9:35. just slightly delayed. either one sounds grak a great option to me, guys. >> make sure -- get on the flight to cancun, that's our advice. >> go to the south -- don't go north. if you really want to go >> there she goes. >> contessa, thanks. contessa brewer at logan when we return the tax reform effect and what companies like morgan stanley and jetblue are saying about it. take another look at the premarket. futures do like the jobs number, even though it's below the 190 estimate, 148 was the number for december we're back in a min ut i had frequent heartburn, but my doctor recommended... ...prilosec otc 7 years ago, 5 years ago, last week. just 1 pill each morning, 24 hours and zero heartburn. it's been the number 1 doctor recommended brand for 10... ...straight years, and it's still recommended today. use as directed. morgan stanley says it sees fourth quarter earnings taking a 1.25 billion dollar hit due to a charge primarily for remeasurement of tax credits jetblue announcing it believes tax reform will be good for the airline and as a result plans to pay each of the 21,000 crew members a $1,000 bonus by the end of february. keeping in track of the companies doing this, i don't know why it's 1,000 seems to have caught some air but it's -- dozens -- >> still waiting for easterbrook to do 1,000. that would be a big hit to earnings my favorite is tom farrell from dmin yan, paying a $1,000 to anyone who used scana, the south carolina utility he's willing to give $1,000 to people he didn't even know and don't even work for him. the citigroup deferred taxes was 20 billion, that could crscrew p anybody's calculation at morgan stanley. obviously what we're seeing is time after time, upgrades based on the fact that there's a lot more cash and therefore there's a lot more earnings expansion. now, when we see the actual earnings, i think we will begin to hear about bigger buybacks but it's better to do the $1,000 first and buybacks later. >> big bank earnings start a week from today. >> could be exciting. >> some argue this earnings season will be cloudy because of tax reform uncertainties and charges and benefits we don't really understand yet. >> i think for the international companies, the story will be the weak dollar. i think for the domestics, what they will do is kind of subtly say to the analyst, hey, this could be good and that's more reasons to upgrade i think a lot of upgrades we're seeing are trying to get ahead of -- >> like which ones, for example? >> when you see a lot of these, let's talk macy's. wayne hood comes out with macy's and there's aturn. jeff beggantette says if everytn goes right and we think this and think that, there could be more to it. maybe five cents you're absolutely right, they are not going to say raising numbers on this. but what they will say, if everything goes well and do this and do that, that's going to be the crucial thing, they want grist. they want to be able to say the restaurant business is better, the retail business. i saw a note today from one of the analysts saying this is the greatest time we've ever seen for retail it's an upgrade. barclay, upgrade target. which is an interesting piece by the way, if you look at it, not upgraded because amazon is going to buy them. it was the wayfair, amazon is going to buy wayfair can you imagine being at amazon, we're going to buy wayfair, target. >> it must be entertaining. >> don't you think people say why don't tesla buy and why doesn't -- >> amazon whole foods deal was a break through deal but that does not mean there's five more breakthrough deals. >> citi takes their target on amazon to 1400 today. >> that was a great piece. >> their top pick. >> and their ranking of internet stocks, moved from 15 to 8. >> it's a good day, play forearmmy. what i liked about that call, expedia -- >> i think the second -- tied for second -- >> priceline -- i know the last quarter was bad. we don't hear about the air bnb as much as killing the industry. there was a piece negativeabou wynn today, i think that piece is wrong headed. i think wynn will be good. there was a sense that everything was going to be destroyed by other players in the internet and going to have to be more advertising which drove expedia down home away can chip away at air bnb. good business. >> one last point on retail, you mention the barclay's upgrade of target and lowe's as well. >> and the lowe's call looked great to me particularly with the weather. >> given the jobs number today, some have pointed out to see retail employment fall in an expansion like this is practically unprecedented. >> well, look, let's talk about elle brands, everyone was excited about elle brands which is victoria secret and bath and body works then you saw victoria's secret was weaker, i don't know macy's did layoff people -- >> the closures -- >> i think if they close every one of them the stock will fly. >> it's amazing. it is amazing. i con, an icon listen, look, my mom worked at li lindt and gimble's was the greatest place in the world. these were the institutions, greatest floor in the world, sixth floor. >> different age. >> they sold stamps there. anyone collect stamps anymore? >> janet yellen >> really? i miss her. >> a couple weeks left on the job. >> she's dynamite. we'll get cramer's mad dash and count down to the opening bell and look at the premarket on this friday morning as the market goes for a fourth day of gains. back in a minute hi, i'm mindy kearns. it's great to finally meet you. nice to meet you too. your parents have been talking about you for years. sorry about that. they're all about me saving for a house, or starting a college fund for my son. actually, i want to know what you're thinking. have a seat. yeah. knowing that the most important goals are yours. with 15,000 financial advisors, it's a big deal. and it's how edward jones makes sense of investing. about seven and a half minutes to the opening bell. ahead of the open on roku. >> roku like fitbit and go pro, tremendous enthusiasm. stock went way up. citi says it's a sell. second negative piece we've had and now talking about the lockup expiration in march. this is -- if supply can hit -- i'm surprised they don't get an early xpiration, and google and amazon and apple have products this was a very exciting deal for people who have roku i think that the tightness of the supply -- in other words they do a little bit, bring a little bit public and once it goes up they do a lot. i think you have to be ahead of the march expiration i think it's going to be not done going down. i now it's a fave, my father loved roku, everybody likes roku but there's a lot of competition coming. >> took us by surprise here. wood became a billionaire on paper. >> it was a great quarter for roku the fact is stocks do go down if there's going to be a big lockup expiration >> are there parallels to gopro with this? by the way, tech crunch today reports 200, 300 layoffs. >> i think there are parallels, but not yet. the fitbit -- everyone loved fitbit had a fitbit then they had a fit because they bit and they got crushed >> i've never heard you say that before. >> just came up. i don't know, just like a diddy. >> the go pro stuff is in their aerial division. >> maybe it's time to go barbarell ash did what a movie that was. >> we'll get the opening belinl a couple of minutes. don't go away. you're watching cnbc, "squawk on the street. the opening bell in two and a half minutes on this jobs friday the jobs number, 148 below the 190 estimate but unemployment remains at 4.1 for the third month in a row it's the 87th month in a row of job creation, the longest on record >> these things are positive i'm watching my twitter feed, everyone hates me today. that's okay. >> you did note there's a lot of negativity. >> because the job growth is good sometimes i get pushback people say job growth is good, therefore they think i like trump and don't like michael wolffe book and bannon no i like numbers. you can't suddenly say they are bad numbers because i don't like president trump. i'm not saying anyway. these are good numbers there's a lot of hiring, it's perfect pretty positive. but i was surprised by the retail decline it says that the amazon death star is accelerating. >> retail lost 20,000 in the month. in the year it lost 67,000 as we've said earlier -- >> that's incredible at this point economic expansion with so many people having jobs, you would think they would be adding people like mad but they are trying to figure out which stores can stay in business. >> you mentioned the white house and so much news regarding michael wolff's book one thing that lost attention, this move to open 90% of offshore areas to oil drilling. >> those of us who remember the spill off california, remember that there's also state people who are against it and governor scott against it in florida. it's a nice thing to talk about if you're an oil bull. sl slumberjet, they are still not ready to drill sometimes you can't drill, there ain't no oil that's also a hazard we're going to open up atlantic city to drilling maybe there's no oil there >> you're skeptical about it happening to scale. >> i'm very skeptical. that is kind of a -- i'm rolling back what obama wanted to do but you can't roll back an oil spill that people in california never forget >> doesn't take away from the run that commodities have had. >> wow. >> the commodities index up for 15 straight sessions. >> oh, man. >> copper, it's not even china, it's our country, asia, europe a lot of people believe europe -- there's 800 million people on that continent and they are not just all a bunch of jokers, go to milan, go to milan and you'll see some of the greatest manufacturing in the world. italy is not dead. they are not spain is pretty good >> yep. >> and it's reflected today as the dax is up three days in a row for first time since november 1st there's the opening bell and the s&p at the bottom of the screen. at the big board, professional bull riders and vanity fair corporation celebrating the 20th anniversary of professional bull riding at the nasdaq n nutrisystem celebrating national fit week. >> i went to a bull fight last year i had to leave they shouldn't do that >> that's tough. >> that's no good. >> a bull fight. >> i think the bull is not happy about it generally either. >> to me a bear fight would be different. i don't like the bear -- honestly that was one of the most violent and horrible things i've ever seen the greatest news story was mark zuckerberg saying he's got to fix facebook i can tell you i got 499 other companies that need fixing wants to fix facebook, best run company in the world >> he did have a remarkable post about his goals for the year he's learned mandarin, right, met a new person every day, traveled all 50 states and now he's going to fix facebook. >> i am sick of him. how much does he have in -- he's an amazing man i've had people -- top of wharton come to me rejected in the 18th round of facebook people used to go to goldman because it was so hard to go, now they can't get into facebook facebook has got dorms like the four seasons to attract smart people but he's got to fix it. he better get to work right now. >> facebook is up half a percent. ge for a brief moment led the dow. >> it trades with oil. >> you said yesterday, it's an oil company now. >> so what, locomotive business is good but they've got to sell the baker hughes, don't forget turbines need higher prices. the business is horrible, jeff immelt got that wrong. power, infrastructure, a lot of that is energy you really need -- this is a company -- the industrials i know that are not directly related to the oil patch, flannery could get bailed out by oil. he could get much higher prices for what he wants to sell. maybe he can break up baker hughes over time he needs to sell some things but oil is going his way if oil goes to 70, the stock goes to 22 >> kind of like caterpillar benefited from some metals. >> caterpillar -- again, i'm worrying about 2.32. but caterpillar has great business everywhere. when you dig a ditch to have a pi pipelines, nice upgrades to pipelines today, you need caterpillar to do sme sort of construction i come back and say it's a worldwide company. same thing with deere. worldwide company. these companies are doing fabulous. >> we have record highs this morning on the nasdaq dow and s&p. earlier this morning jim you mentioned usg and multiple upgrades as people are going to need drywall in some parts -- >> a lot of people don't know they need drywall. i have a friend who is a drywall guy, haley, i mean, these are halcion times, once you get mold in there, you have to rip everything out and you'll run out -- u.s. chip, registered trademark, sheetrock what a business one of the most interesting companies up today is zylinks, retires and goldman goes hold, not just to buy, but to conviction buy what the heck is going on there, communication stabilization. i thought that was the single most important upgrade today amazing upgrade. cisco is catching up when you see xilinx, got communications 5good really rolling, i think that bodes very well for tech, very well. >> rails doing well, norfolk up 2% plus. >> the ubs note on union pacific, union pacific -- these are just -- a lot of this is autos by the way coal people are saying coal shipments will come back i say that what this is about is a renaissance of manufacturing and tom farrell was talking about it again, ceo of dominion. business is so great there and we don't talk about it i wish president trump would recognize how great business is in those -- i mean, he's got to get a little more upbeat. >> upbeat? >> upbeat about what regions are doing well he should be visiting regions where it is -- give him a bus ticket and people in places that don't have jobs, the southeast is having a renaissance not unlike -- post civil war it hasn't been this good. it is amazing what's going on down there. >> it's being reflected today in some of the transports, ups, jim, fedex, and then as you said earlier today, the home builders. >> how can people be upgrading fedex? i like international paper because the stuff comes in a box. it really is -- this is -- ecommerce is incredible and fedex is doing great and ups is doing great. look at these stocks fedex went down when they reported, it shows the market has tremendous forgiveness quality. >> doesn't have a great record of gapping up on earnings. >> no, because fred smith is underpromised and overdeliver kind of guy. the ceo also an economist and great man and anyone who followed that stock for a long time knows fred smith is terrific i like the fact that ups got it together so many times -- remember, they've actually had a couple of holiday seasons that have been too hard for them because of the overload one of the things that's really happened, we recognize from fred smith's call no customer is more than 3%. what that meant is amazon is not more than 3%, very positive. >> probably -- i can't think of a company more vocal in a gi way on tax reform and gdp and volume and profits. >> he's an economist and told a really good story. there are areas of the country though that are -- fedex is another -- a hub that's in memphis. i'm hoping titans do well. ti titans and bills, that would be an odd super bowl. i do think that area and fedex really told the best story about what's going on in our economy and how strong it is i like that. >> on the weak side by the way is a company con stelation brands, they did not deliver top line beat. i got to find out about that that's a great company, $3 billion buyback. >> worst performer on the s&p right now. >> along with various oil companies, marathon, chesapeake is down, retail, jim we have l brands and ulta in the red. >> ulta is okay. union pacific, that's another company that puts out a fabulous quarterly conference call. when union pacific is doing well, that's the southwest doing well that's also imports doing well and it's nafta doing well. so -- >> to that point our friend david rosenberg made a point about the fallout between the president and bannon he writes, the latest open rift moves the power of influence move to the traditional gop base and away from the populists and includes the trade protectionist. let's see how the round of nafta talks but the loss of the radical influence is hardly a bad thing. >> peso could go back to 15 because of trump i think -- look, i think that the mexican -- remember, we did nafta when it was 4-1. i think mexico plays unfair. and it got worse because the president bashed mexico so the peso got even cheaper. it's $5 an hour, cheaper to build china in mexico than china and also easier. i've got a union pacific track near me in the place i have in mexico three times a day that thing is just chugging. and it's so long it's one of those trains like goes on forever. if you got behind that thing in a railroad, you would be like -- two time zones union pacific and ksu, another one has done well. i really like the rails. they are in great shape. they are really fabulous it's really good. >> one thing i want to throw at you today was charts, the bulls don't want to see biut there are things like the two-year passing the s&p dividend yield, first time since march of '09. s&p and ev ratio getting close to march of 2000 those things worry you or not? >> i always worry about overvaluation, counter that with what david temper said i think you have to keep an eye out for these things and always reason you why you might not want to be in the market. >> the idea it's expensive, doesn't seem like ridiculous. >> we've got to see the earnings, if you really do get what the kind of numbers that i'm hearing from companies, then i think they are going to surprise to the upside and i'm not as concerned about valuation if what i'm hearing when i interview all of these ceos comes true, there's a lot of great bull markets, whether it be -- i think the worldwide auto maurrket and construction s very good. there's bull markets all over the place. >> there's plenty to choose from. >> oh, my, i'm look the at nvidia down today, ahead key note on sunday i went to every single smart tech guy to understand what this man was saying this man is the most brilliant man in technology right now with the exception of i've got to fix facebook zuckerberg -- have to fix facebook what does he want? >> some people might argue there's things you could tinker with regarding personal data, the ability to manipulate ads -- no >> i don't know. >> you like -- my wife was playing where is the heck is waldo, they are using what's app over there he single handedly destroyed the snap thesis, world domest natio, okay. >> boy, do we ever love it he's got to fix it but we do love it. record highs for the dow and s&p and nasdaq and transports on pace for the best week since early december let's get to bob pisani. >> this is a very important day. you might say we had a disappointing number on jobs why doesn't the market sell off. there's a sigh of relief i want to show you futures because we had minimal reactions and futures rose modestly on the initial report and moved slightly to the downside you can see the move as we came in here, generally positive. i think the important thing here is the markets will lead because there's still job growth but not so strong it dramatically increases the fed will get more aggressive raising rates and that's become a major issue for everything let's talk more about what the sectors are moving, once again, it's the sick lickal stocks doing really well. there's your semis, a market leader transports, industrials and material energy a little bit on the weak side because crude and natural gas are trading to the downside. but this is that sick lickal play we talked late yesterday and today about the risks to the market out there i smell a little euphoria returning. a lot of people think 2018 is going to be really good. most people hated this market rally for years, that's the best friend we've had people hate it if people start really liking the market rally, be a little concerned about that the economic data has been well above expectations but today it's below i think the market is a little relieved that all of a sudden the numbers aren't going off of the charts here. earnings guidance, boy, expectations are high. folks, i'm not talking about beating by a couple of cents on the numbers, they want a big beat on earnings and buybacks and capital expenditures up. people have very, very high expectations this is not going to be easy to fulfill it let me talk about these euphoria signs, when the american association of individual investors sentiment numbers, 58% of bullish bullish means i think markets will up in the next six months, highest level in seven years they've had. i'm so bullish i have to sit down that's kind of funny, if you know ralph, but that's a sign. margin debts at record highs right now. that's something that i watch and prices are up, might be able to understand it i don't think any of this is off the charts worry some but it is a slight shift in sentiment. and the problem is we're in unchartered waters we haven't seen a strong start like this in ages and ages everything is up here. big cap is up, small cap is up, russell is up. growth is up value is up. you've got cyclical stocks like industrials that are up. the only thing not really participating is the intersensitive group you've got reats and virtually everything is up the first data on fund flows, i watch mutual fund flows and etf. we've gotten the first data, notable yoet flows from u.s. equity funds, mostly big plain vanilla investments. and we're seeing some inflows in international equity this makes sense, tells me there's still some concerns about high u.s. valuations and most people feel other parts of the world like europe and emerging markets have more reasonable valuations and if you buy into the continuing global growth story, that makes sense you rotate out a little bit. we'll keep an eye on that. we particularly saw fairly large outflows this week from the biggest etfs out there spy saw notable outflows and qqqs saw outflows and russell 2,000, iwm, these are big three saw outflows the russell and s&p has had somewhat higher fees and seen rotations among the etfs recently there's some factored in there do note people are moving money around the world and looking for better value right now that makes perfect sense to me we're at records folks, 69 points on the dow. >> thank you very much let's get to the bond pits, rick santelli is at the cme in chicago. happy friday. >> good morning. viewers, carl, if you look at the interest rate flex complex, pretty much unchanged looking at twos or tens multiday chart of two, you can see it's had a steady ascension. from that perspective, even though it's unchanged on day, it's up seven basis points on the week if you look at the multiday of tens, it is much flatter also unchanged on the day, but we're up four basis points on the week and maybe in november 1st chart will show us a lot of things especially if you overlay bund yields on top of it remember, we had a fed raise rates on december 13th clearly you can see both charts were affected by that and seem to have grabbed back together. this is significant. we continue to monitor the spread which will help us calibrate various things maybe down the road and help us calibrate the differences ultimately and the policies of mario draghi and jay powell and mr. kuroda if you look at the january start of euro versus dollar, january 15, that is a three-year chart, you can see that's about the last time we were toying with this over 120 handle the dollar index doesn't quite come back that far but as you see on the chart starting on november 1st for the dollar index, it is literally walking along right on the edge of the precipice and not acting well. although it is up a bit today. carl and jim, back to you. >> all right, rick, thank you. rick santelli. when we come back we'll talk to apple steve mill an vich saying there are signs of improving demand for the iphone x. take a look what apple is doing today. in the meantime record highs across the board dow is up 63,25139 back after the break former uber ceo travis kalanick selling 29% of stake in his company for $1.4 billion the sale is part of a broader investment deal led by soft bank they're buying shares by early investors and employees. would value it at $48 billion, which is not the number we thought it once was. >> i bet you when spotify comes public, you'll see a valuation north of that. >> you think spotify's valuation is bigger than uber's. >> i think spotify is an amazing company. i think people are underestimating the worldwide nature and underestimating the artificial intelligence. it is incredible we use spotify the whole vacation it's just amazing. how do they know what i want to hear the answer is, artificial intelligence like netflix. that's the deal to watch that's what people should get in >> they hit 70 million users paying subs. >> i first heard about it from you. took them ten years, zero to $10 million, and then ten months, $10 million. >> this is a fabulous service, and it's not that expensive. >> do direct listings bother you as opposed to typical road shows, underwriters? >> i think it's smart. google did it, came public in the '80s and soared. i think these guys are going to let everybody in and it's going to be great and one of those deals i pound the table on >> people are saying it could rewrite the playbook of how the modern tech company goes public. >> that would be great they are revolutionary by the way, they're funny. >> funny, yes. >> they're funny those are guys that when you talk to them, you're just saying, all right, i'm not on your plain i know i'm stupid. i'm an idiot, but i love you >> that's going to be one to watch. when we come back this morning, we'll get "stop trading" with jim. dow up 63 points thomrerdhe fourth day in a row wi se co highs back in a minute trading. >> there's been a lot of love lately to cvs. this is charlie victor, not channel 2. we always confuse that on the trading desk and the reason is because of this aetna deal. i want to keep track there have been a series of retailers that people gave up on, all it be home depot, whether it be costco, whether it be kroger. this is the one to watch because they are readjusting the business model, and i think it's not done going higher. i like it very much. >> we'll watch that. what about tonight, "mad money"? >> constellation brands. what's going on. the revenues, let's check. i bet you this is a better story. $3 billion bye' back rob sands, not that he tells a good story it's the story's good. so if you're still selling the stock, why don't you wait to see what he has to say a lot of people putting the hate on me that i like buying intel he's a nice guy. he was mad at me because of my nvidia i posted a picture of nvidia, by the way, on twitter, just in case anyone is wondering what it looks like just wait until that sunday keynote. ces. >> speaking of sunday, you're rooting for the falcons. so you can face them >> yes, because i don't want to face this kamara/engram duo. i know the titans -- i'm saying you're getting some teams that we didn't expect to see this weekend. >> that's true >> i'll still be glued and you know, my wife is talking about coming back some time in january from india that could be exciting too i'm looking for gandhi and deb >> we'll see you tonight "mad money," 6:00 p.m. eastern time >> when we return, when will the party end? ewt,roget thoughts from jim star fnt page story in the "times" today. we're back in a minute good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with melissa lee, mike santoli at post 9 david and sara are off markets up for the fourth day in a row. jobs number comes in at 148,000. ism services, let's get to rick santelli >> yes, our december read on ism services, nonmanufacturing, the biggest swath of the u.s. economy, minus -- no, i'm sorry. 55.9 55.9 that is definitely a little less than expected, and sequentially lower than 57.4. let's look at our november read on factory orders. up 1.3%. that's close to expectations and when you include a half a percent revision to our last look, which was down .1, now stands at up .4, it's pretty good x transportation, up .8, that's very solid if we look at capital goods orders, here's where i get a bit depressed. i want to see a big number, it's not big. it's down two tenths if you look at shipments versus orders, it's down one tenth. all in all, i think these numbers are somewhat mixed when you look at factory and durable goods. and when you look at ism, it's a bit on the weak side if we look at ism and dig down a bit deeply, we had the unemployment report today. i was disappointed in the headline 53.3 on the employment index -- i'm sorry, that's new orders versus 58.7. i don't seem to have the employment that was new orders. we'll dig through it and keep you updated. the aftermath in the marketplace, hardly a blink. the sort end continues to put away 196 now trading in twos but the long end unchanged overnight carl, all yours. >> thank you very much our road map begins with back to business residents up and down the east coast trying to get back to normal after the massive bomb cyclone closed businesses, canceled thousands of flights. >> looks like the worst is not over for retail. holiday sales are ignored as stores continue to close we'll break down amazon's role >> plus, the president looking past 25,000, making a new prediction for the dow a look at the trump trade and the stocks that could get us to 30,000 >> first up, wall street shaking off the weaker than expected december jobs number the economy adds 148,000 jobs, below estimates, but unemployment holds steady at the 17-year low of 4.1 now we have a four-month low in ism services steve liesman digging through all that >> this weaker than expected jobs report, economists say doesn't change their view that the jobs market is pretty strong, actually here are the numbers carl was telling you. 148 versus a survey or consensus of 180 just a little below. october/november revisions add up to minus nine average hourly wages, reasonably strong gives us a 2.5% year over year rate unemployment rate unchanged. 4.1%, and labor force participation at 62.7% ian shepherdson says the rise in payrolls is much smaller than implied by the array of private sector surveys we're inclined to see this as noise rather than a shift in the trend. john herman suggests some drag from statistical issues like strong seasonal adjustments depressing the number and a low response rate. he says that could mean upward revisions in the future to these numbers. here's where the jobs were 30,000 on construction that's a big number. leisure hospitality, up 29,000, also strong. education and health services, that's always strong manufacturing is a good number retail, a bit of a mystery, down 20,000 question is whether some of those jobs were over in warehousing, giving all the online retail sails that exist these days what's all this mean for the fed? we expect diminishing slack to be a major driver of fed policy this year, and we still expect the fed tohike rates in march. he's not alone the march probability, 78% for a rate hike. august now is the next 50% or greater probability there. it was sment, so they pushed that ahead a little bit, and december, right around 39% all these probabilities are higher now after the number. the african-american unemployment rate worth noting it sank to a record low of 6.8%. that's as low as it's been since i have data going back to 1971 the gap between black and white unemployment also a record low, 3.1% should the fed let the economy to run to allow greater strides in these metrics >> earlier this morning, you said you thought it was a three-handle on the unemployment rate that spooked the fed. so 4.1% allows them to breathe easier >> a little bit for a little while. the fed is going to have to grapple with a three handle on there. how does jay powell react to this does he let the economy run? how does he react to the incoming stimulus that's out there from the tax cuts? either call it keynesian stimulus or supply side stimulus from the corporate tax cuts. we could get a bit of both actually, and the question is does jay powell think three is okay for this year you can see from the possibilities the market just getting around to kind of thinking about three it's got two priced in, thinking about the third, and the bet, the second favorite on the fed this year is for four rate hikes, not three >> you know, steve, in terms of the impact on the economy, it's sort of easier to put a number on the impact on profits, but is it harder to put a number on impact on cap-x and capital expenditures that seems like a back end, back half of the year sort of story in terms of the impact on the fed, they might not have any sort of data in their hands until way late in the year, right? >> i think that's right. in terms of whether or not we're going to get, i think it's worth explaining the dynamic you're talking about. do you get capital spending? does that lead to greater productivity, which allows for higher wages and a higher run rate of the economy without causing inflation. you're absolutely right. by the way, that's beyond just a year some of these things take two and three years to actually happen i think what the fed is going to watch, melissa, is the inflation dynamic. if we start getting higher inflation then the fed is going to say, maybe we ought to do those three and maybe think about a fourth if inflation stays depressed, down in this 1.5% and below level, it will be a question or whether or not the third rate hike actually appens >> thank you, steve. for more on all of this, we're joined by gabriella santos and diane swann. good morning to you both what do you think about this conflict between pricing pressure at the producer stage and final stage pricing power and the implications on margins and the markets? >> so, i think if we think about where inflation is right now, there was this narrative starting around the second quarter of last year that there was no inflation anywhere to be found. and indeed, we did see some disappointment there for about four, five months. let's not forget that has already started to turn around in the last three inflation prints we got. if we think about does that trend continue, we absolutely think so because we have seen some pressures that are coming down the pipeline. the dollar is weaker you are seeing producer prices increase and touching kind of on the employment report here, we do continue to expect the trend of higher wages to continue as well so overall, we think the story for 2018 is inflation does continue to make that slow, but none the less, it does continue to turn around and get back to 2% >> diane, i guess when it comes to the fed and what incorporates inflation into the process here, it still seems to be a little bit of a moving target in terms of what they're looking for. how does it also fit in, how does today's jobs number fit in with the mosaic the fed is presented going into this year it seems like the bond market is not set up for a strong number we didn't get a strong number today. are the economic surprises starting to retreat and the bond market got it right again? >> i actually think we're going to see a stronger 2018 we have good momentum going into the year we did have a little bit of a miss on some of these numbers. the miss in the retail sector, again, related more to restructuring. it was a great holiday season but people moving from in stores to online purchases is really having a structural impact in fact, this was the first year that we lost retail employment since 2009 and we closed about as many stores in 20 sv17 as we did in 9 despite the fact the consumer is back and confidence was relatively high. i do think you have some momentum and the economy has more cylinders to run on we are getting some investment, we'll get more, and the critical issue for the fed is do we get that inflation come pack we're already starting to get inflation pick up, and some of the special factors that held it down, not only are they abating, but special factors are coming in to push it up all the insurance rates going up because of the disasters we had. insurance rates on cars. the fire coverage in california was high we're all going to be paying for that going forward also the cost of construction going up very rapidly because of the repairs and the shortage of supply in the single family mark those pressures are going to come through and you are going to see wage gains. minimum wage gains as well as wage gains because of acute labor shortages. it all comes together to have a more positive view for the fed on inflation, which will get the doves off the sidelines and ready to headache rates. i think we're up for four rate hikes by the fed >> inflation there are signs of inflation things are setting up nicely for 2018 we're sitting here at record highs. at what point do you think interest rates, wage growth, inflationary pressures become a negative for markets are we a long ways off >> i don't think we're a long ways off from that there is certainly a positive impact on earnings, on the market, from these corporate tax cuts we need to curb our enthusiasm a bit for 2018 already because we do expect wages to continue rising. and interest rates to rise as well there's somewhat of an offsetting factor there as well. it's not all perfect, right? margins are going to slowly start to come a little under pressure where that leaves us is still a positive earnings growth year. still a positive year for the market, but overall, we need to tame our expectations for exactly how much we can get out of this market, already past its ninth year >> expectations are interesting. i wonder as you enter a year what that means for a portfolio. does it mean add more to stocks? >> what that means to us is we could get away for a few years, 2011 to 2016 to only focus on u.s. equities, to only have that exposure we can't get away with that anymore. it is a later cycle economy. i think that's the big takeaway from the jobs report so it is a later cycle kind of market we need absolutely need to have that exposure to europe, to emerging markets we can't get away with just the u.s. anymore >> unless, as steve pointed out and started the whole discussion, productivity truly isn't a game change, right >> well, i do think productivity growth is picking up a little bit. you do see that late in the cycle. you see companies try to marry capital with human capital to make -- get over the skills gap. that's good news whether or not we see a big move up in productivity, this is many years down the road. we're not going to see enough of an increase in productivity to stave off inflation we need. a welcome rise in inflation, ear to offset the rise in wages we have coming down the pike. that's also welcome news, but this is a period in time where it's late in the cycle we're now 8 1/2 years in we still have legs to go on this expansion. i do think you have to start looking at the dynamics of the fact markets may not be pricing in the rise in interest rates and rise in inflation and reflation trade abroad as well i agree that the u.s. has had an awful lot of euphoria. i have want seen anything in financial markets like this since 1999, 2000 the unemployment rate may be at a 17-year low, but the 4.1% is not the same 4.1% we saw 17 years ago. >> diane, gabriela, thanks >> apple confirming its products are vulnerable to a security flaw disclosed by major chip makers leaving nearly every device vulnerable to hackers josh lipton joins us with more >> apple now for the first time weighing in about meltdown and specter, the two recently disclosed security vulnerabilities that have the tech industry on high alert. apple says all ios devices like iphones and ipads, as well as macs are affected, importantly, though, company emphasizing there are no known exploits actually impacting users at this time tim cook's company released software fixes for ios devices, macs, and apple tvs to help defend against meltdown, the apple watch is not affected. apple says the fixes do not impact performance in the coming days, apple is also going to release an update to its safari web browser. researchers have shown certain amd and arm based chips are also affected in other apple news, jimmy iovene is leaving the company in argue, four years after apple bought beats he's described as having a limited role within the company. robert condric who has been with apple for some 20 years running apple music which now has 30 million apple subscribers. iovine is the one who convinced will.i.am to meet eddy q his departure is coming as competition in music streaming heats up spotify planning to go public. they have 70 million subscribers. apple declining comments for this story back to you. >> a lot of headlines on apple today. thank you, josh. >> when we come back, residents trying to recover after a bomb sicloem strikes the east coast we'll bring you up to speed on the latest plus, the president outlining a new goal for the dow a look at stocks that could get up to 30,000 record highs across the board today. dow up 62. "squawk on the street" continues in a moment. well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. residents trying to recover from that massive bomb cyclone, as snow, ice, and arctic temperatures hit the east coast, causing flight cancellations and business closures. mike seidel joins us with more hi, mike >> good morning, melissa from riverhead, new york, out here in long island, 70 miles from midtown manhattan nearby islip had 16 inches yesterday. records across many areas of the northeast, central park, just under 10 airports are getting back online today. still over 1100 flights have been canceled nationwide most of those in the northeast airports so if you're flying in and out, you probably have already found out if your flight is canceled or delayed the weather is fine except for the wind 30% of flights cancelled at laguardia and logan airport in boston just be patient. they're trying to find seats for us not easy for us either as far as the weather goes, the snow is over with, but boy, it's going to get cold. the coldest weather of the season thus far. even colder than last week and last weekend temperatures will be below zero in interior new england the next several mornings new york city, expected to drop down to zero on sunday morning that takes 4 off the previous record, and the biting wind continues. this storm is so powerful, even though it's up in canada, we have that and the arctic high, winds gusting 30 to 35 miles per hour it won't be until sunday morning before we see the winds die off and the windchills climb back above zero but many areas tomorrow morning in the northeast and new england will be down well below zero, 20, 25, 30 below zero. places like burlington, vermont. so a very cold weekend the snow is going nowhere. by the way, the only airport still closed from the storm, charleston, south carolina, trying to open up on monday. they have to wait for the sun to melt the snow. they have no snow removal equipment in charleston. back to you guys >> of course, they wouldn't. mike seidel, our thanks to you with the east coast bracing for those dangerous arctic temperatures this weekend, just what's the impact of the region's ski industry, which is reliant on day and weekend visitors in the already short ski season joining us now, tim boyd, peak resorts founder and ceo. great to have you with us. snow is great. snow and subzero temperatures are not great for your business. you already had to close at least for one day one ski area how is it shaping up in terms of the impact of the bomb cyclone >> it's certainly going to be a challenging day or so, but the good news from our perspective is the fact that after this next day or so, the skiing conditions are going to be stellar up in the northeast, and going forward, people will have a great conditions to enjoy. >> how many ski resorts are still open or have you had to close because of the combination of those very, very cold temperatures and the snow? >> well, really, the temperatures aren't as big a factor as the wind is. the wind can be a factor, especially at the higher elevations so as far as operating the chair lifts, but usually, again, that is usually only an issue for a day or so. so we can usually get back into the saddle pretty quickly. >> how has it shaped up so far in terms of consumers' willingness to buy passes, and passes are the big trend in the business that's what you're really depending on, right? >> yes, it's been very positive. we don't really have a demand issue in the ski industry. you know, in our particular case, we have a peak pass that we offer regionally in the northeast at our seven resorts that we introduced about two years ago. and we have seen significant growth in that pass over the last two years and it's been a great driver for us, not only on the skier visits, but all of the other streams of revenue we generate off our ski areas. >> such as what? what is your biggest revenue generator outside of the pass? and how has that been year on year >> generally, f & b and ski school are a large generator, revenue stream for us, along with the retail aspect, too. >> you have also got a drifter category, which is an 18 to 29-year-old pass that is growing, too tim, what are your forecasts in terms of the future, because theoretical theoretically, if these guys are skiing now, they'll ski later today? >> i think that's all true it's really important for the development of our skiers because basically, in our business, the segment that we operate in primarily is that drive to day segment of the industry, and that's who we're kaun constantly producing, these new young skiers a lot of it is attributable to the terrain park issues that have added value to the experience at our resorts because the train parks have added the aspect of being able to change the experience on an ongoing basis throughout the ski season it's very similar to having an amusement park where you can change the rides during the season that's had a great impact on our industry but it's had an even bigger impact on our segment of the industry because we're the ones who really are driving that younger skier demographic. >> finally, tim, i wonder if the consolidation we have seen in some of the western resorts puts pressure on you guys to consolidate as well. >> well, we are -- we're constantly looking for acquisitions we are in the m & a game you know, the space that we operate in generally is the day and overnight drive segment. most of that, the big consolidation has been in the destination side so from our perspective, we still think there's opportunities out there for us that are really in kind of a different game than what the vales generally operate in >> tim, thanks for your time appreciate it. >> thank you tim boyd, peak resorts when we come back, department stores' deepest woes look like they're here to stay despite upbeat holiday sales, more shop closures announced a look at the amazon effect. meanwhile, stocks at this hour holding on to a relatively slow gain, adding to record highs of yesterday the dow now above 25,100 at quk t s,1 "sawonhetreet" will be back after this. retail stocks losing some momentum so far in 2018. also responsible for today's weak december jobs report. the retail sector, that is last year also saw the highest recorded number of store closures with soft line retail hurting the most, while online shopping gaining the most. is this a growing tale of two retails? joining us is john kerwin, and stacey widilous. we set this up, these are kind of well known dynamics, but interesting that we came into this year with some enthusiasm about the state of the consumer, consumer confidence, people who are spending again it seemed like the retail stocks came back because maybe there was some stabilization in the industry where does that set us up going into the new year? >> sure, mike. you're right we had the perfect setup for holiday this year. we had freezing cold weather, the lowest savings rate in a decade, we had the tax hope, the consumer feeling good. a great setup, and the sale side chases that into the new year. now we have to look at reality and say these stocks have rallied significantly. certainly the department store space is not dead, but i would argue there's still a lot of shrinking that needs to happen in 2018. >> john, it's interesting because you have the kind of field position of the stocks, despite the known dynamics with amazon here. and yet you're getting a tax break that maybe is going to buy some time for some of these physical retailers to figure things out, or is that all just going to be new ammunition for cut-thr cut-throat competition how are you playing it from an investors point of view? >> stacey is right, this was a perfect setup for the entire sector sentiment that was terrible in the group. double-digit multiples in the group. traffic did go positive. brick and mortar traffic went positive for the first time in overthree years during the holiday season the stocks have reacted quite favorably to that. the group on average is up over 25%. we're not chasing the whole group, but there's still some selective names you can buy here that we still like and tax reform is a big deal some of these high-paying tax rate payers, the brick and mortar retailers, could see depending on how much they let flow through, mid-teens to 20% eps boost. that's a big deal. the fundamentals for the group got better when you look at the spring and january, february, march, when people start reporting q4 earnings, the fundamentals won't be as bad as the last couple years. the last few years, we got guidance from companies that sent the stocks down meaningfully >> we showed your picks. you're talking about burlington, ross stores. so still on the value side of this business. >> we do look discount retailing. burlington is our favorite name within that. we think the low-income consumer that doesn't benefit from the s&p 500 being up 25% recently and bitcoin doubling every few months, the low-income consumer is still very stretched. burlington is a name that we think can double free cash flow over the next three to four years. big income tax beneficiary from tax reform low-income consumer is trading down into these deep value driven theme stocks. >> stacey, it sounds like you think some of these stocks still have some downside left. take a look at macy's, for instance, just off the top of my head here. it's hard to believe that macy's was a $17 stock just in october or so, and it's still trading at $24 or so. so what are the stocks in terms of the ones we have seen have really stellar rises in the past three months or so maybe short covering, maybe investor enthusiasm, that still have some downside >> you're exactly right. you have seen this huge rally back, whether it's macy's or urban outfitters, and i still think there are structural challenges out there, and certainly if you think about the ongoing shift that's still going to online from in stores, which is lower margin, it still presents a big challenge, click and collect still represents a big challenge as labor in store will be taken away from customer facing issues and certainly, you know, in my store checks in the last six weeks, talking to people in stores, something i'm hearing is that actually a lot of retailers and brands are pulling back on labor in stores and allocating to non-customer facing at a time when business is getting a little better that's actually backfiring a bit into q1, so you look at the job numbers, that retail lost 20,000 in december, and say well, maybe retailers are getting a little too lean and mean because of that shift to online, and maybe that backfires >> yeah, tough transition. stacey, we did note you like target we'll keep an eye on that one. >> absolutely. >> thank you very much the president setting his sight on a new milestone for the dow after hitting that 25,000 mark yesterday >> broke a very, very big barrier, 25,000. and there were those who say we wouldn't break tw25,000 by the n of the eighth year we did break 25,000, very substantially break it, very easily i guess our new number is 30,000, but what it means is every time you see that number go up on wall street, it means jobs, it means success, it means 401(k)s that are flourishing >> in our etf spotlight, dominic chu is back with a look. >> as we talk about some of the best performing industry groups of last year, one that stands out is the defense industry. aerospace stocks stocks tied to either military equipment and/or the production of planes and other vehicles if you take a look at some of the etfs out there that track it, one of the big ones out there is ticker ita, which is the i shares aerospace and defense industry, etf, that etf is up 33% in the course of the past 12 months compare that to the blisting 20% in the s&p 500, and you see why some people say the defense industry has been one of the purer plays on the trump administration there are a handful of stocks driving these gains. if you look at the boeing dow component stock that we talk a lot about, boeing has added about 900 points to the dow's 5,000 point rally from the 20,000 mark. aeroenvironment is the top related stock, but nowhere near the size in terms of market cap that boeing is in. if we're looking for places that could carry the dow to new levels, boeing may be a big part of that story. in this particular etf, the biggest stocks are going to carry the most weight. a market cap weighted index tracking etf you look at names like united technologies, also names like boeing, also other stocks out there, say general dynamics, boeing already up 87% for the year 12 months. $177 billion market cap. united technology is up 17%. lockheed martin up district% general dynamic, 17% raytheon, 28%. as we talk about the exchange traded fund and the stocks that could get us to dow 30,000, if it ever happens, it could be boeing is one of those driving names as part of the bigger defense trump trade, carl. back over to you guys. >> thank you very much dominic chu at hq. let's get to landon dowdy today for a cnbc news update at this hour >> good morning. i'm landon dowdy here's your news update at this hour michael wolff is defending his bombshell account of the trump white house. the author of "fire and fury" told the "today" show he stands by, quote, absolutely everything in the book. this comes after president trump tweeted that it was filled with lies meanwhile, massachusetts residents bracing for a deep freeze after the winter storm that dumped as much as 20 inches of snow in some areas. forecasters say frigid cold temperatures will persist through sunday >> sears will close more than 100 unprofitable sears and kmart stores this spring this is in addition to the 63 stores the retailer is closing this month and the more than 300 locations shuttered last year. and forget painting a team's color on your face the jacksonville jaguars are getting in the spirit a little differently. this weekend's playoff game, the team will serve teal colored burgers, drinks, and ice cream the jaguars will play the buffalo bills on sunday. and that's our cnbc news update at this hour back over to you >> going to be a good weekend of football thank you very much. when we come back, the dow blowing past 25k, but when will the party end? pulitzer prize winning columnist jim stewart of "the new york times" weighs in on that just an hour into the trading session. take a look at the markets record highs earlier across the board. ucbuup5.settled back just a toh t 4 >> as we have had from multiple u.s. banks and europeans, getting the size of one-off writedowns deutsche bank released theirs. bigger than expected 1.5 billion euros and the stock has moved sharply down down 5%. was down 2% before the news. about an incremental 3% decline. $1.5 billion in terms of the writedown, bigger than expected. quite small compared to some of the u.s. writedowns, but big compared to the european writedowns, and deutsche bank's capital base is tighter than some of the u.s. banks the size of the writedown taking a bigger hit they also updated trading performance. relevant for the u.s. banks when they start reporting next friday they expect trading to be down approximately 22%. a little worse than some of the guidance we have had from the u.s. guides that were saying high teens declines or 20% declines that also probably weighing on this 5% share decline. >> things are going to heat up on your beat in the coming days. thanks u.s. markets are continuing the new year rally, hitting new records across the boards. now higher for four straight days our next guest asked in his weekly column, after dow 20k, when does the party end? joining us at post 9, jim stewart is with us front-page piece, and the "times" quote of the day from this gentleman you quote, saying the longer we go without essentially a correction, the greater the risk that this will end badly. >> absolutely. it's great, a great milestone, the economic looks fantastic i hate to be the one to kind of throw cold water on all this, but i think it's time for a sober reassessment here. and he's right the longer this goes, the worse the hangover is going to be. we have seen this with previous huge run-ups, wow, the second longest ever but if you look back at the longest, did not end well. and i'm not saying it's going to end tomorrow, by any means, but it will end some day stock markets go up, they go down and my message to readers, to viewers, is are you ready for it are you comfortable with what you have for when it does come >> what do you mean by sober reassessment a 10% check, right 87, what >> look, everybody i talk to who is sophisticated about the market feels it's overvalued, overbought it's gone on too long, and they don't know when it's going to end. i looked at all the major bank forecasts for the year they're all up in the 10% range for the coming year. that makes me nervous. even the ones saying the party will end are saying we don't see a bear market here given the strength of the economic fundamentals but something in the 10% to 12% range would certainly seem appropriate given how far things have gotten i mean, everybody is saying, oh, we're going to have higher groethd, higher earnings in late stages of bull markets, those expectations, the reality of higher earnings never quite catch up to what the expectations are and there needs to be a readjustment even in a good growth scenario, we have to temper our expectations going forward >> one of the things irn terms of gauging what an eventual hangover might look like are what are the excesses and silly behavior billing up on the way before we get one of these reckonings it's hard to isolate it this time, and i wonder if you have a view on what those excesses are. >> it is always hard to see them there's always a story that makes them kind of plausible in the moment until it's not plausible anymore. clearly, the bitcoin mania, the krime cryptocurrency thing is a warning bell >> it doesn't have any impact on the markets though nothing, no institutional ownership. >> this is not - >> no leverage involved here >> this is not 2000 when we had people saying, oh, my god, the internet, they're going crazy. i'm not seeing any of that but if you look at sectors, there are certainly sectors that are more overvalued than others. and the technology sector as a whole, the faang stocks. look at those numbers and look at the kind of growth projections on what are now pretty big bases that are going to be necessary to sustain some of the high multiples. that would make me nervous and i think, again, investors are just hitting an index funds may not realize they have been sleeping this year, which is probably good. they might want to wake up and see, well, what's in there and how these sector balances shifted. technology has grown to a huge percentage of even the most basic diversified funds. they might want to consider there are plenty of funds like value funds that don't have such a high percentage of technology. maybe it's time to think about some of that late-stage markets commodities do sort of well. you might want to start looking am i underweighted there and overall, just rebalance, rebalance, rebalance this is a great opportunity to look at your portfolio and see, am i out of line with my targets. >> we have started to see these rotation into materials already. energy to some degree, industrials. the cyclical elements. is this basically -- a call by the market people you have been talking to, for a decline in technology specifically? >> they're not calling for a decline necessarily, because by the way, technology does do well in late-stage bull markets, but it has done well already they're saying when the party does end, it's going to really end hard for those stocks. typically, looking all the way back into the nifty '50 years when everybody thought the stocks couldn't go down, they went down the worst. and these darlings right now, people are, again, i would just say, are they out of balance in your portfolio then do something about it rather than waiting to let the market do it for you >> viewers have a couple thaults. one is jim stewart missed the rally, which i don't think is true you have been quite constructive >> i have been saying stay fully invested and i'm not saying change that now, but stick with your discipline. and that may mean selling something. i love the quote in the story where somebody asked a great financier how he got so rich he said i sold too soon. >> finally, they say we have never had trump as president or someone who is going to let the economy run as hot as it appears he will. does that change anything? >> well, no in my view the minute i hear somebody say we have never had this before, i start to get wary because, no, we have never had this exactly, but we have had similar things before by the way, whether the economy runs too hot or not is not purely trump's decision. it's the federal reserve we're getting a new chairman they're talking about the number of interest rate hikes i would definitely keep my eye on the fed if it starts running too hot, it's going to be the fed's responsibility >> that's a wild card, isn't it? >> any president ever said no, cool off the economy, any president? >> i think it's very risky for trump to be taking credit for the rally. again, when the party does end, does he want to blee blamed? i doubt it >> some might argue second degree consequences. jim, rilit's a good piece. >> when we come back this morning, a lot to watch with the dow up 50 points we'll look at the sectors that have grown the most in the last year and are doing the best so far this year. "squawk on the street" continues in mut aine. (barry murrey) when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that the golden hour. evaluating patients remotely is where i think we have a potential to make a difference. (barry murrey) we would save a lot of lives if we could bring the doctor to the patient. verizon is racing to build the first and most powerful 5g network that will enable things like precision robotic surgery from thousands of miles away. as we get faster wireless connections, it'll be possible to be able to operate on a patient in a way that was just not possible before. when i move my hand, the robot on the other side will mimic the movement, with almost no delay. who knew a scalpel could work thousands of miles away? ♪ with dow 25,000 in the rear view mirror, how do we get to dow 30,000 adgniout on trinatn.cnbc.com more "squawk on the street" coming up. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. let's get to the cme group right now in chicago rick santelli with the santelli exchange >> welcome and good morning. i would like to welcome jim beonco our first employment report of 2018 your thoughts? >> weak. it was below average it wasn't weather. people not working due to bad weather. 120,000 december average, 117,000. it's one number, but we can't sugar coat it. it was on the weaker end maybe next month's number will be stronger, but we started off with a weak number >> steve liesman brought up a great point this morning he's unsure, and we know the seasonable adjustments to all these numbers in this kind of post-credit crisis, aren't really very accurate in my opinion. when you add in how much is outside brick and mortar and steve basically was talking about how they haven't coped with that, with regard to some of the numbers, do you think that's a distortion in jobs reports, especially in retail? >> yeah, i think there is a lot of distortions in the report the nature of work is changing, the nature of people is changing 95 million people unemployment, they don't get counted you have a low unemployment number, but if you ask most people who don't have jobs who haven't looked for one in the last 30 days, they consider themselves still unemployment even though they're not counted. there's been a lot of trouble with trying to cope with the ever changing employment situation in these numbers >> the speed limit on most major highways is 55 if everybody's speedometer was changed to show ten miles different than 55 so they're going 55 on their speedometer, but they're going 65, police would have a field day writing tickets, would they not? >> absolutely. calibration of fl employment and the context of 95 million people that in many ways have been written off by central banks, that's a calibration error, which leads to policy question marks am i off base making that comment? >> absolutely not. take it one step further if you wanted to interject politics into this, why donald trump is president, 95 million people don't have a job that stopped looking for jobs full stop. every other statistic, distant second that's what's driving the belief on the state of employment >> also driving the belief that many said he's never going to see 3% or 3.5% i disagree with the premise on both your thoughts? >> i agree with you, too no reason the economy can't grow at 3%. it has been growing at 3%. if you look at the soft data, which was very good -- >> it backed up, but i said it wasn't terrific, but only backed up to a couple months comp all in all just not as straight up as it was. >> right, but still well above and suggesting things are going well the nfid surveys, businesses are very optimistic about the future, especially post tax cut, and there's reason to think this strength will continue >> i think the president should back away using the stock market as a barometer for the economy, because even if 38% correction is a technician, would still leave a bullish stock market, but leave the media in a field day with regard to the president. >> i agree >> we're out of time they are yelling at me that's a point to consider next time mike santoli, back to you. thank you, jim >> thank you >> thank you, rick and jim let's send it over to john fortt with a look at what's coming up on "squawk alley." john >> it's a tail of two techs. we have the numbers behind a couple of analysts, one of whom doesn't like snap and one of whom still likes amazon, even at 're inlevels wegog to dig into why coming up on "squawk alley". the economy has added an average of 171,000 jobs per month during trump's first year in august. economists say deregulation and tax reform have boosted hiring kate rogers joins us with other factors at play and the sectors growing the most under this presidency hi, kate >> hi, melissa economists do credit deregulation and tax reform, but say other factors were at play, a weaker dollar, rebounded oil prices, and a stronger global economy. the sectors that added the most jobs in 2017, business and professional services, leisure and hospitality, health care, construction, and, of course, manufacturing. benefiting companies like where we're live today >> i will be the greatest jobs president that god ever created. >> when it comes to president trump's job creation success, some sectors fared better than others >> there's only two sectors where we've seen a stronger strength of job growth post election than pre-election and those sectors are mining and the manufacturing sectors. >> the manufacturing industry that trump promised to revitalize big time added 171,000 jobs from the election through the end of 2017. >> we were losing 2,000 jobs per month prior to the election, and then post election we saw the manufacturing sector adding 16,000 jobs per month. >> a weaker dollar and global economic growth are seen as the biggest driving forces, along with deregulation and anticipation of changes in tax structure. in the nation's most manufacturing intensive state, indiana, companies are planning to continue hiring in 2018, but are also bracing for issues finding skilled workers. >> we have had a record number of job announcements over the last 12 months, but it also creates issues in trying to get people to come to indiana and work here. >> indiana is embracing competitive recruitment packages, even talking about offering a tax credit for out of state residents to come here and work in the manufacturing industry they are looking to hire at least 1,000 more workers in the u.s. this year, many based here in indiana guys, back over to you >> great piece, kate rogers joining us this morning talking about the jobs picture in america. when we come back, the war on pot the mayor of berkley is going to weigh in on the fight to legalization and the city's hopes of cashing in. dow is up 56 "squawk alley" coming up your brain changes as you get older. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. good morning, it's 8:00 a.m. at apple headquarters in cupertino, california, it's 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ ♪ ♪ good friday morning, welcome to "squawk alley," i'm carl quintanilla with john fortt, mike santoli at post nine of the

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